The collapse of cryptocurrency exchange FTX has led to a lot of impacts on the sports world. Those include the dissolution of their arena naming-rights partnership with the Miami Heat and the City of Miami, plus the seemingly-impending end of their MLB sponsorship. And FTX’s bankruptcy filing has now also led to a class-action lawsuit that names not just that company, but also many of the athletes, entertainers, and celebrities that promoted it, including Tom Brady and Gisele Bündchen.
But Brady and Bündchen are far from the only ones to promote FTX, and they’re far from the only ones named in this lawsuit. Other sports figures include NBA on TNT analyst Shaquille O’Neal (we imagine this particular business move will not make his upcoming docuseries), Golden State Warriors’ star Steph Curry, the Warriors themselves, Udonis Haslem, David Ortiz, Trevor Lawrence, Shohei Ohtani, Naomi Osaka, and more. One interesting non-sports name there is Curb Your Enthusiasm creator and star Larry David, who famously promoted FTX during a Super Bowl ad this year (seen above, the only Super Bowl ad he’s ever done). That ad showed off David downplaying other investment ideas that went on to be big:
Here’s more on the lawsuit, from Todd Spangler at Variety:
In a complaint filed Nov. 15 in Florida federal district court, Edwin Garrison, an Oklahoma resident who says he purchased a yield-bearing account from FTX, seeks to represent a class of “thousands, if not millions, of consumers nationwide” who were allegedly defrauded by the company. The lawsuit alleges FTX and ex-CEO Sam Bankman-Fried, who are also named as defendants, used the celebrity endorsers to target “unsophisticated investors” in a “Ponzi scheme” to keep the crypto exchange afloat.
“Part of the scheme employed by the FTX Entities involved utilizing some of the biggest names in sports and entertainment — like these Defendants — to raise funds and drive American consumers to invest” in FTX’s yield-bearing accounts, which the lawsuit alleges represented unregistered securities under federal and Florida law.
The suit seeks unspecified monetary damages, alleging the FTX collapse resulted in consumers collectively losing more than $11 billion.
The lawsuit also specifically cites a 2021 “Are You In” ad with Brady and Gisele Bündchen. Here’s that ad:
It’s uncertain whether this will actually lead to anything beyond bad publicity for the sports figures and celebrities mentioned here. A common lawsuit tactic is to start by naming everyone possible, but that list is often whittled down before a suit progresses too far. And it’s not always possible to find someone responsible just for an endorsement. But if the plaintiff (and eventual plaintiffs, if this does make it to class-action status) is able to find information showing that some of these endorsers (some of who also received equity stakes in FTX) had knowledge of the company’s financial issues at the time they promoted it, this might get interesting.